Financial. Statements

Transcription

1 Financial Statements 2015

2 Contents Report of the Board of Directors 1 Income statement 4 Balance sheet 5 Cash flow statement 7 Notes to the financial statements 8 Auditor s report 16 RAO Nordic Oy Tammasaarenkatu 1, FI Helsinki office@raonordic.com Company ID: FI

3 REPORT OF THE BOARD OF DIRECTORS Report of the Board of Directors 1. Development of operations during the year 2015 The main parts of RAO Nordic s business operations in 2015 have been electricity imports from Russia and selling it to Nordic electricity market in Finland and in Norway. In 2015 RAO Nordic has delivered to Nordic market in total 3,8 TWh of physical electricity (3,5 TWh in 2014). The electricity delivery to Russian electricity market was 0,02 TWh (0 TWh in 2014). The gross sales figure was EUR 133 million (EUR 136 million in 2014) and the operating profit was EUR 0,2 million (operating loss EUR 6,4 million in 2014). During 2015 the major part of Origination portfolio has been disposed as a result of the company s decision to withdraw from Origination business. 2. Major events after the balance sheet date There have been no events after the 31 December 2015 that may influence or have any material impact on the activities of RAO Nordic or its financial position. 3. Estimate of the future development The business strategy of RAO Nordic Oy has not been changed during The focus of the company is on cross-border trading and business activities related to power interchange across the border connections between Russia and Nordic countries. 4. Estimation of major risks RAO Nordic s business risks can be summarized as follows: 1. Operating risk: Operating risk refers to the inherent or general business risk of a company such as country risk, political risk and economic risk. General business risk refers to risks related to general business concerns of regime stability, turmoil, corruption, financial transfer, loan default, direct investment and export markets. Due to the nature of the business i.e. trading electricity which is mainly purchased from Russia, RAO Nordic s operating risk can be seen higher than moderate. 2. Market risk: Market risk is the risk that is incurred due to uncertainties in the market. Uncertainties may include fluctuations in raw material and production costs, demand, and pricing. Market risk is a standard risk borne by any firm involved in market driven transactions. Due to the fact that RAO Nordic trades electricity which is rather volatile commodity, RAO Nordics market risk can be seen high. 3. Product liability/warranty risk: Product liability risk arises from the sale of defective products. Warranty risk refers to the risk that companies face when customers make claims against them if products and/or services are not offered according to the agreed upon terms and conditions. Due to the nature of the product and the fact that the electricity is always available, RAO Nordic s product liability / warranty risk can be seen rather low. 4. Bad debt risk: Bad debt risk is the risk that a supplier will not receive payment from a customer. When trading via Nord Pool Spot AS and NASDAQ OMX exchanges is concerned, the bad debt risk is regarded low. As RAO Nordic s clients are well established businesses, the bad debt risk can be seen as moderate. 5. Foreign exchange risk: Foreign exchange risk arises from fluctuations in currencies where a company bears costs in one currency and receives revenue in a different currency. Due to the fact that the physical electricity is almost purely purchased and sold in euro and financial trading is carried out in euro, RAO Nordic s foreign exchange risk can be seen as rather low. RAO Nordic Oy Tammasaarenkatu 1, FI Helsinki office@raonordic.com Company ID: FI

4 REPORT OF THE BOARD OF DIRECTORS 5. Development and research activities RAO Nordic does not have major development and research activities due to the nature of its business. 6. Valuation of financial instruments The financial instruments are recognized at fair value according to the Accounting Act 5:2a. Commodity risk hedging Commodity risk hedging has been applied since the financial year The Company has partly applied hedge accounting in accordance with IAS 39 as so-called cash flow hedge. A change in the fair value of electricity derivative hedge contract proven effective is entered directly in shareholders equity in fair value reserve, and only after the realization of the forecast electricity purchases it is entered in the income statement as an adjustment of the hedged purchases or sales. As at there were no open commodity hedging due to the market reasons. 7. Key figures of the parent company RAO Nordic Oy business and its financial position. Personnel key figures of the parent company RAO Nordic Oy in thousands of EUR 2014 in thousands of EUR 2013 in thousands of EUR Net turnover Operating profit Net profit Operating profit % 0,0-4,7-0,5 Return on equity % 17,7-25,5-44,6 Equity to assets ratio% 61,3 31,6 36, in thousands of EUR 2014 in thousands of EUR 2013 in thousands of EUR Staff cost Average number of employees RAO Nordic Oy Tammasaarenkatu 1, FI Helsinki office@raonordic.com Company ID: FI

5 REPORT OF THE BOARD OF DIRECTORS 8. RAO Nordic Group There were no changes in the Group structure in Environmental issues In the past the environmental issues have had no material impact on the business as RAO Nordic and its subsidiaries have been mainly involved in the energy trading business. But being engaged in purely trading business RAO Nordic has continuously looked for potential investment projects in EU countries. Nowadays the development strategy of the Group emphasizes the green power project development, technologies that provide the highest environmental benefit. 10. Shares The share capital is split as follows: The Company has one series of shares (1 vote/share) 1305 shares 1305 shares All shares are equally entitled to distribution of dividend 11. The proposal of the Board of Directors of the profit distribution. The profit for the year 2015 amounted to 4,894 thousand EUR. The Board of Directors proposes not to pay any dividends for the year Board of Directors, Managing Directors and Auditors The following persons included to the Board of the company during Karina Tsurkan, Head of Trading Department PJSC Inter RAO Anton Badenkov, Advisor of Chairman of Management Board of PJSC Inter RAO Dmitriy Palunin, Chief Financial Officer PJSC Inter RAO Ilnar Mirsiyapov, Head of Strategy and Investment PJSC Inter RAO Oleg Zakataev, Managing Director of RAO Nordic Oy Auditor has been Ernst & Young Oy and Mikko Rytilahti as a chief auditor. RAO Nordic Oy Tammasaarenkatu 1, FI Helsinki office@raonordic.com Company ID: FI

6 Income statement Income statement Currency EUR Note NET TURNOVER , ,49 Raw materials and services Raw materials and consumables Purchases during the financial year , , , ,81 Staff expenses 3.2 Wages and salaries , ,23 Social security expenses Pension expenses , ,25 Other social security expenses , , , ,49 Depreciation and reduction in value 3.3 Depreciation according to plan , , , ,38 Other operating charges , ,07 OPERATING PROFIT (LOSS) , ,26 Financial income and expenses Income from group undertakings , ,72 Other interest and financial income From group companies , ,05 From others , ,69 Reduction in value of investments held as non-current assets 0, ,73 Interest and other financial expenses For group companies , ,59 For others , , , ,40 PROFIT (LOSS) BEFORE EXTRAORDINARY ITEMS , ,86 PROFIT (LOSS) BEFORE APPROPRIATIONS AND TAXES , ,86 PROFIT (LOSS) FOR THE FINANCIAL YEAR , ,86 RAO Nordic Oy Tammasaarenkatu 1, FI Helsinki office@raonordic.com Company ID: FI

7 Balance sheet Balance sheet ASSETS Currency EUR Note NON-CURRENT ASSETS Tangible assets 4.1 Machinery and equipment , ,12 Other tangible assets 3 800, , , ,12 Investments 4.2 Holdings in group undertakings , , , , , ,24 CURRENT ASSETS Debtors Short-term Trade debtors , ,19 Loan receivables , ,72 Other debtors , ,30 Prepayments and accrued income , , , ,76 Cash in hand and at banks , , , ,84 ASSETS TOTAL , ,08 RAO Nordic Oy Tammasaarenkatu 1, FI Helsinki office@raonordic.com Company ID: FI

8 Balance sheet LIABILITIES Currency EUR Note CAPITAL AND RESERVES 5.1 Subscribed capital Subscribed capital , , , ,00 Legal reserve 396,63 396,63 Retained earnings (loss) , ,97 Profit (loss) for the financial year , , , ,74 CREDITORS Long-term Loans from credit institutions , , , ,56 Short-term Advances received , ,55 Trade creditors , ,46 Amounts owed to group undertakings , ,55 Other creditors , ,16 Accruals and deferred income , , , , , ,34 LIABILITIES TOTAL , ,08 RAO Nordic Oy Tammasaarenkatu 1, FI Helsinki office@raonordic.com Company ID: FI

9 Cash flow statement Cash flow statement Currency EUR Profit before tax Depreciation Financial items and disposal loss Decrease in receivable Decrease in payable Interest paid Interest received Dividends received Income tax paid 0 0 Net cash from operating Subsidiary disposal Net cash from investments Long-term borrowings Long-term borrowings repaid Short-term borrowings Loan repaid Dividends paid 0 0 Net cash from financial Net increase in cash Balance Balance RAO Nordic Oy Tammasaarenkatu 1, FI Helsinki office@raonordic.com Company ID: FI

10 NOTES TO THE FINANCIAL STATEMENTS Notes to the financial statements of Notes to the preparation of the financial statements: Valuation- and perodization principles and -methods: The non-current assets have been stated at cost and inventories are stated at the lower of cost and realisable value by following the fifo principle and the lowest value principle of the 5 paragraph 6 1 moment. The acquisition cost of the non-current property will be depreciated according to plan. The depreciation plan is determined by experience. The remainder of the acquisition cost and residual value will depreciated during the estimated useful life. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remereasured at their fair value. The fair value of electricity derivatives is based on quoted electricity market prices at the closing date. Fair values of options are determined by using option valuation models. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument. Cash flow hedge The effective portion of changes in the fair value of electricity derivatives that are designated and qualify as cash flow hedges are recognised in equity. The gain or loss relating to the ineffective portion is recognised immediately in the income statement. Derivatives that are not accounted for under hedge accounting Fair value changes of these electricity derivative instruments are recognized in the income statement. Commodity risk hedging Commodity risk hedging has been applied during the financial year The company has partly applied hedge accounting in accordance with IAS 39 as so-called cash flow hedge. Derivatives RAO Nordic trades derivatives for the hedging of selling prices of physical import from Russia. Due to the low market price there were no hedging in Deferred tax The deferred tax amount is recognised on the fair value of gross hedge reserve acknowledged to be effective at the end of each reporting period. The tax rate is Finnish corporate income tax rate 20%. Notes to the company which is member of the Group: Mother company: PJSC INTER RAO UES Bolshaya Pirokovskaya str., 27/3, Moscow,Russia is the Mother Company of RAO Nordic Oy The copy of the Group Financial Statement of the Mother Company is available at the above mentioned address. RAO Nordic Oy has not prepared the Group Financial Statement due to the accounting law (changed ) chapter RAO Nordic Oy Tammasaarenkatu 1, FI Helsinki office@raonordic.com Company ID: FI

11 NOTES TO THE FINANCIAL STATEMENTS 3.1 Notes to the revenue Revenues by segment of business: Electricity trading , ,37 Profit from financial trading , , , ,49 Revenues by geographical market Finland , ,90 Nord Pool (Norway) , ,96 Sweden , ,68 Russia , , , , Notes to the personnel: Number of employees: Number of persons the company has employed during the financial year on the average. Staff costs: Wages and salaries , ,23 Pension costs , ,25 Other social security costs , ,01 Total , , The basis of the depreciation according to plan and changes: Item Depreciation percentage Depreciation method Machinery and equip. 25% residual value depr. RAO Nordic Oy Tammasaarenkatu 1, FI Helsinki office@raonordic.com Company ID: FI

12 NOTES TO THE FINANCIAL STATEMENTS 3.4 Other operating charges Optional social security expenses , ,08 Expenses of premises , ,34 Expenses of use of software, machinery and , ,35 equipment Travel expenses , ,05 Entertainment cost 9 289, ,47 Marketing expenses 8 791, ,71 Administration expenses , ,21 Disposal of shares 0, ,87 Other business expenses , , , , Total income and costs from the investments in the group and affiliated companies: Financial income , ,72 Interest income , ,05 Impairment 0, ,73 Interest expenses , , , ,45 RAO Nordic Oy Tammasaarenkatu 1, FI Helsinki office@raonordic.com Company ID: FI

13 NOTES TO THE FINANCIAL STATEMENTS Notes to the balance sheet assets: 4.1 Intangible and tangible assets Tangible assets, machinery and equipment Acquisition cost ,78 Additions 0,00 Disposals 0,00 Acquisition cost ,78 Acc depr at the beginning of the fiscal year ,66 Depreciations of the fiscal year ,78 Depreciations of the disposed items 0,00 Acc depr at the end of the fiscal year ,44 Cost at the end of the fiscal year ,78 Acc depr at the end of the fiscal year ,44 Book value ,34 Book value ,12 Piece of art 3 800, ,00 Expensed small acquisitions 64, ,70 The depreciations of the non-current assets and other tangible assets: Machinery and equipment , ,38 Other intangible assets 0,00 0,00 Depreciations total , ,38 The total residual value of the machinery and equipment: Machinery and equipment in balance sheet in total, , ,12 of which the residual value is: , ,12 RAO Nordic Oy Tammasaarenkatu 1, FI Helsinki office@raonordic.com Company ID: FI

14 NOTES TO THE FINANCIAL STATEMENTS 4.2 Investments Group companies Associates Acquisition cost , ,85 Additions 0,00 0,00 Acquisition cost , ,85 Reduction in value 0, ,73 Book value , , Receivables from group companies Electricity trading receivable ,55 0,00 Loan receivables , ,72 Accrued income 8 549, , , ,51 Other debtors VAT receivables ,44 Security deposits , , , ,30 The material items in accrued short-term receivables: Accrued interest receivables 8 549, ,79 Hedging assets , ,98 Prepayments , ,00 Other receivables , , , ,55 RAO Nordic Oy Tammasaarenkatu 1, FI Helsinki office@raonordic.com Company ID: FI

15 NOTES TO THE FINANCIAL STATEMENTS Notes to the hedged financial instruments Electricity derivatives (1000e) Fair value Adjustments in Income Statement Adjustments in fair value reserve Notes to the liabilities: Equity: Subscribed capital Share capital , ,00 Share capital , ,00 Legal reserve ,63 396,63 Legal reserve ,63 396,63 Subscibed capital at the end of the fiscal year , ,63 Retained earnings , ,97 Profit distribution 0,00 0,00 Retained earnings , ,97 Profit/loss for the fiscal year , ,86 Retained earnings at the end of the fiscal year , ,11 Total equity , ,74 Distributable profit Retained earnings , ,97 Profit /loss for the fiscal year , ,86 Total , ,11 RAO Nordic Oy Tammasaarenkatu 1, FI Helsinki office@raonordic.com Company ID: FI

16 NOTES TO THE FINANCIAL STATEMENTS 5.2 Amounts owed to group undertakings Purchase payables 0, ,25 Accruals , ,77 Loans , , , , The material items in accrued payables Hedging liabilities , ,89 Salary accruals including social costs , ,51 Accrued bank interest and provisions 0, ,66 Total , ,06 VAT liability , ,77 Payroll tax liabilities , , , ,16 Liabilities Rent of premises Rent of premises To be paid during the next fiscal year , ,80 To be paid within 2-5 years 0, , , ,20 Rent of machinery Rent of machinery and it-programs and it-programs To be paid during the next fiscal year , ,67 To be paid within 2-5 years , , , ,50 Total , ,70 RAO Nordic Oy Tammasaarenkatu 1, FI Helsinki office@raonordic.com Company ID: FI

17 NOTES TO THE FINANCIAL STATEMENTS Salaries and other compensation of managing director and members of the board: , ,71 The Members of the Board and the Managing Director do not have a separate pension plan. They will retire according to the pension law of Finland. Auditors fee Fee for annual audit,ernst & Young Oy Chartered Accountants , ,00 List of book-keeping files and storage method: Daily book General ledger Accounts receivable Accounts payable Payroll accounting Financial statements Specifications to Financial Statements Receipt code ADP-reports ADP-reports ADP- sub accounting ADP- sub accounting ADP- sub accounting Binded book Binded book storage Bank receipts Nordea 11 paper receipts in folders Sales receipts 30 paper receipts in folders Purchase receipts 55 paper receipts in folders Automatic VAT-postings 99 paper receipts in folders Memorandums 90 paper receipts in folders Financial statements must be stored not less than 10 years from the balance sheet date (PAR 2:10). The receipts of the fiscal year must be stored not less than 6 years from the end of the closing year. RAO Nordic Oy Tammasaarenkatu 1, FI Helsinki office@raonordic.com Company ID: FI

18 Auditor s report Auditor s report (Translation) To the Annual General Meeting of RAO Nordic Oy We have audited the accounting records, the financial statements, the report of the Board of Directors, and the administration of RAO Nordic Oy for the year ended 31 December, The financial statements comprise the company s balance sheet, income statement, cash flow statement and notes to the financial statements. Responsibility of the Board of Directors and the Managing Director The Board of Directors and the Managing Director are responsible for the preparation of financial statements and report of the Board of Directors that give a true and fair view in accordance with the laws and regulations governing the preparation of the financial statements and the report of the Board of Directors in Finland. The Board of Directors is responsible for the appropriate arrangement of the control of the company s accounts and finances, and the Managing Director shall see to it that the accounts of the company are in compliance with the law and that its financial affairs have been arranged in a reliable manner. Auditor s Responsibility Our responsibility is to express an opinion on the financial statements and on the report of the Board of Directors based on our audit. The Auditing Act requires that we comply with the requirements of professional ethics. We conducted our audit in accordance with good auditing practice in Finland. Good auditing practice requires that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and the report of the Board of Directors are free from material misstatement, and whether the members of the Board of Directors of the company or the Managing Director are guilty of an act or negligence which may result in liability in damages towards the company or have violated the Limited Liability Companies Act or the articles of association of the company. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements and the report of the Board of Directors. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation of financial statements and report of the Board of Directors that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements and the report of the Board of Directors. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements and the report of the Board of Directors give a true and fair view of both the company s financial performance and financial position in accordance with the laws and regulations governing the preparation of the financial statements and the report of the Board of Directors in Finland. The information in the report of the Board of Directors is consistent with the information in the financial statements. Helsinki, 12 February 2016 Ernst & Young Oy Authorized Public Accountant Firm Mikko Rytilahti Authorized Public Accountant RAO Nordic Oy Tammasaarenkatu 1, FI Helsinki office@raonordic.com Company ID: FI

19 Tammasaarenkatu 1, FI Helsinki office@raonordic.com Editor: Evgenia Khashchanskaya Design: Typeface: